Frequently Asked Questions about the
Foundation Plan…..
The Foundation Plan:
The Effect of the IRS 501 (c) Category
 Short definitions: US Internal Revenue Service 501 (c) – Non-Profit Corporations
 501 (c) 3. Typically a public-benefit Foundation supporting charitable, educational and
scientific objectives. Can solicit donations (which are exempt from personal income tax)
and award grants, but can engage in only limited lobbying and cannot engage in direct
political activity designed to support the interests of members (they typically do not have
members). Certification activities do not fit within the range of activities permitted in a
501 (c) 3 Foundation.
 501 (c) 6. Member-benefit corporation, typically business leagues and trade associations.
Can conduct certification activities, and lobby and conduct other political activities on
behalf of and of direct benefit to its members; dues are not tax-deductible, but may be
counted as a business expense. Members are part of the governance structure.
 The current Academy, College, Forum and Society corporations are all 501 (c) 6
corporations.
 The current Foundation for Veterinary Dentistry is a 501 (c) 3 corporation, which would
permit all of the functions envisioned under the Foundation Plan to be pursued legally,
including soliciting tax-deductible contributions and making grants.
 A new parent organization that permits certification activities would have to be a 501 (c) 6
corporation to permit inclusion of certification activity, and thus would not be permitted to
engage in charitable work or solicit tax-deductible contributions. Thus the Foundation plan
offers the advantages of 501 (c) 3 status, but requires the certification activities (Academy,
College) to be under separate corporation control.
 VOHC is a certification entity. Because the Foundation is a 501 (c) 3 corporation, VOHC
will need to stay as an activity of the 501 (c) 6 College corporation.
 The legal requirement for a 501 (c) 3 corporation and independent 501 (c) 6 Academy and
College corporations prevents one of the features preferred by the Strategic Planning
Workshop participants (that the activities of the Academy, College, Forum and Society
would be united under one parent organization with jointly-managed finances).
 Under the Foundation plan, the one-third Forum proceeds will no longer accrue in the
College account. The College Board is naturally concerned that the full cost of its
certification program must be met into the future. A financial projection exercise was
conducted and reviewed by the College Board, which determined that certification
program and central administration expenses can be satisfactorily met from dues and
fees income well into the future, and that the VOHC net income provides a sufficient
safety cushion.
 The bright side of this 501 c 3/6 discussion is that the Foundation has no liability risk for
certification activities. The College will continue to carry Directors and Officers Liability
insurance, with an Errors and Omissions rider.